Can I Keep My House and Car?

In most cases, you do not lose any of your possessions when you file bankruptcy, including your house or car.

In fact, a Chapter 13 bankruptcy is designed to help save assets such as your house or car if you are facing foreclosure or repossession. As you did prior to filing bankruptcy, you continue to pay your obligations on these assets if you’d like to keep them, but as long as the amount of equity you have in the property you own is permitted by the exemptions, the trustee cannot take them. If you have too much equity in your property to protect in a Chapter 7 bankruptcy, you may be eligible to file a Chapter 13 bankruptcy and repay your property’s non-exempt value over a 3-5 year period. A Chapter 13 bankruptcy is not a “liquidation” bankruptcy, and your house and car are not in danger of being taken by the court to satisfy your debts.

Most people who lose their house in bankruptcy actually choose voluntarily to surrender the property back to the mortgage company because they can no longer afford the monthly mortgage payment. Bankruptcy law allows you to walk away from the debt even if your real estate is sold for less than the balance owed on the mortgage.